How to Get a Metal Price for a Concentrate

Example of a Copper Price Suppose your research indicates a price of $3.25/lb Of course this is a price for finished copper – what if you produce a sulfide flotation concentrate? Your flotation concentrate will be smelted into blister copper which will in turn be electro-refined to pure copper Let us first consider electro-refining Suppose we determine that acid dissolution followed by plating out electro- won copper costs 20 cents per lb (you will need to determine your own cost) Electro-refining reduces the value of the previous step – blister copper to $3.05/lb Suppose to the electo-recovery is 99.5% To account for loss in the step $3.05*0.995 = $3.035

Now I need to deal with Smelting Suppose my sulfide concentrate is 30% copper (the grade will vary with mineralogy but 27-32% is where things will usually fall) Suppose that it costs me $7/ton to ship concentrates (this will vary with shipping and destination) Suppose I find that the charge for smelting concentrate is $95/ton (you will get your value from a smelting schedule or perhaps Mine Cost Service) Suppose that smelting converts 96% of my copper in concentrate to blister copper 1 ton of concentrate contains 2000*0.3*.96 = 576 lbs

Turning it into a cost $102 / 576 lbs = 17.7 cents per lb for smelting Value of Blister Copper $3.035 Subtract the smelting cost $3.035 – 0.177 = $2.86 / lb Unaddressed issues Electro-refining uncovers potential values in the anode slimes There may be credits for things such as selenium There may be penalties for some impurities or wastes Arsenic can be a penalty Disclaimer The numbers in these slides are for illustration purposes and should not be considered as a source of actual values or costs.

Example of a Precious Metals Concentrate Suppose I value gold at $1,200 per troy oz. Suppose I have produced a free milling gold concentrate Example suppose my ore contained 0.03 troy oz per tonne gold and the same amount of silver Suppose 12% of the silver was in with the gold Gold nugget will be about 25% gold One tonne of ore yields 0.03 troy oz But suppose recovery is 95% - 0.0285 troy oz At 25% purity the concentrate weighs 0.114 troy oz Since silver concentration was the same and 12% was in the gold nugget They 0.114 troy oz of concentrate contain 0.0285 troy oz of gold 0.00342 troy oz silver

Continuing the Example Suppose our concentrator handles 40,000 tonne per day and all the gold is free milling 40,000 tonne per day provides 40,000 *0.114 oz/ton = 4560 troy oz of concentrate or (12 troy oz/lb) or 380 lbs (dry basis) Suppose the smelter has a treatment charge of $1.50/oz Since the concentrate is 25% pure the effective charge is $6.00/oz for refining $1200/oz – $6 = $1194/oz But suppose the smelter only pays 95% of gold $1194/oz *0.95 = $1134.3 /oz But suppose we get 93% payment on the silver

Continuing with the silver credit There is 0.112 oz silver per oz of gold If silver is $25/oz the is 0.112*25 = $2.8 in silver We get 93% Net Smelter Return $2.6 in silver Add that on $1134.3 + $2.6 = $1136.9 per oz/gold Of course you may want to handle the silver separate If we do then 12% of the contained silver gave us At 95% recovery - $2.6 * 0.95 = $2.47/oz in situ (we will also get dollars from silver in the copper and free milling silver to add) Omission note – most smelters have an assay charge on each batch of gold concentrates In this example we did not establish the size of batch we sent

Now lets look at Silver Suppose my ore contains 0.03 oz/tonne of silver Suppose that 76% is free milling and the rest is in with the gold or copper We already have the silver in with the gold Suppose our free milling silver recovery is 90% 0.03 * 0.9 * 0.76 = 0.02052 oz/tonne Suppose our concentrates are 20% We get 0.1026 oz concentrates/tonne Suppose our treatment charge is $0.25 per oz At 20% purity concentrate our silver is charged $1.25/oz $25/oz - $1.25 = $23.75/oz

Silver Continued 93% net smelter return $23.75 * 0.93 = $22.09/oz Looking at the big silver picture 12% of our silver has 95% recovery and is paid for at $23.25/oz (treatment to gold) 76% or our silver is 90% recovery and is paid for at $22.09/oz Now we need to find the fate of the silver in the copper And weight the average for use in MSOPIT